Budget - Compensation - Fringe Benefits - B05.02
Purpose
This procedure describes fringe benefit rate determination and application.
Scope
This procedure applies to all sponsored projects subject to OHIO Policy 19.045(opens in a new window) Administering External Grants and Contracts set up as separate accounts in the OHIO Financial Management System (FMS).
Definitions
See ORSP Glossary for term definitions.
Procedure
Fringe benefit rates are established in accordance with the Federal Office of Management and Budgeting Uniform Guidance (OMB Uniform Guidance). These rates are negotiated between the University and the Department of Health and Human Services (DHHS), Division of Cost Allocation Services (CAS), which is the cognizant federal agency overseeing the administration of sponsored projects at OHIO. This rate must be applied to all externally sponsored program salaries/wages when developing budgets or for charges of actual salary/wage costs.
OHIO negotiates rates based on the retirement systems available:
- OPERS – Ohio Public Employees Retirement System
- OPERS-LE – Ohio Public Employees Retirements System – Law Enforcement
- STRS – State Teachers Retirement System
Rates are also negotiated for Workers’ Compensation and Medicare and added to the above rates.
The actual cost of Group Health Insurance is added to the fringe benefit costs to obtain the full fringe benefit costs.
OHIO develops and submits the fringe benefit rates annually to DHHS-CAS for approval. Prior year provisional fringe benefit rates remain in effect until DHHS-CAS approves the current fiscal year rates. Once approved, the final rates become effective on July 1.
The fringe benefit rates are calculated by the development of a pool of fringe benefit costs and a pool of salaries and wages. The fringe benefits pool is the numerator and the salaries and wages pool is the denominator. The rate is developed by dividing the numerator by the denominator. This rate represents the percentage that must be used to calculate fringe benefits for sponsored projects.
OHIO negotiates a fixed fringe benefit rate with DHHS-CAS. When the actual costs for the period are determined, an adjustment is made to the rate for the future year to compensate for the difference between estimated and actual costs.
Included in the fringe benefit rate are:
- Retirement
- Workers’ Compensation
- Medicare
Added to the amount calculated for fringe benefits is the actual cost of Group Health Insurance.
Fringe Benefit rates and amounts are charged to the portion of salaries and wages allocable to a sponsored project.
Current fringe benefit rates are posted on the Finance website and are included in the budget templates created by ORSP.
Questions
Questions regarding this procedure can be sent to orsp@ohio.edu.
Forms/Templates
There are no forms or templates for this procedure.
Roles and Responsibilities
OWNER: PI/PD
CONTRIBUTOR: ORSP, CFAO/Budget Unit Manager
APPROVER: Department Chair, Center Director, Dean
Review/Revision History
Created 02/16/2023